Political discussion and ranting, premised upon the fact that even a stopped clock is right twice a day.

Tuesday, March 17, 2009

Rick Who? YouTube and the Music Industry

If you're not familiar with the phenomenon of "rickrolling", it's a running Internet joke where you pretend to link to something of great interest and, when the target of your joke clicks the link, you instead direct readers to a video of Rick Astley's singing "Never Gonna Give You Up". This joke has brought attention to a singer who few who had otherwise heard since the late 1980's, resulting in a 2007 comeback and Astley's winning the "Best Act Ever" award at the 2008 MTV Europe Music Awards. In other words, a huge amount of fame, attention, and no doubt money flowing directly from Astley's presence on YouTube.

Speaking to the Sun newspaper, Pete Waterman, the man who co-wrote the 1980's hit (as well as a slew of other hits as part of the Stock Aitken and Waterman trio), said that Google only paid him £11, that's 27.5 pennies per million views.

Google, which earns £3 billion per annum, claims that PRS, the body representing songwriters and other artists in the UK, has been asking for a royalty fee per video that was way higher than what it used to be before, which meant that Google would be losing money each time a video is viewed.

If Waterman hasn't seen a huge spike in royalties as a result of Astley's resurgence, something that would not have happened but for YouTube, the problem isn't Google's royalty payments - it's that Waterman was a lousy negotiator back when he wrote the song.

Really, it's a bit like my hacking navigation systems so that when people asked to be directed to their favorite restaurants they were instead taken to a performance artist - let's say, a mime doing "man in a box". Almost none of them have any interest in the performance, particularly if they've "fallen for the joke" before. Even fewer of them will notice that there's a billboard for a car dealership in the vicinity of the mime. And almost none will be inspired to check out the car dealership as a result of the misdirection. That's similar to how rickrolling works, except Google isn't the one playing the joke, has to pay for the mime (the server load and bandwidth necessary to play the video, plus a royalty to Marcel Marceau for originating the mime's act), and is trying to pay for it all with ads that only generate revenue when somebody acts on them.

You can argue, "Google benefits from the notoriety they get from having these videos online". Well, quite obviously, so did Rick Astley and, thus, so did Pete Waterman. If that's irrelevant, then the question is, if you just got £11 in your pocket that you would otherwise have never received, for doing no work and expending zero effort, why are you complaining that the company that gave you the £11 isn't also losing money on the deal?

I'm not unsympathetic to the artists, but this makes for a lousy example of the injustice of Google's royalty scheme.

It may be hardball, but I understand Google's taking down the videos in response to the artists' demands. If the deal is so bad for the artists, why are they upset that their videos aren't available on YouTube? Could it be that, yes, all that free publicity is worth something after all?

Pete Waterman's arguments in the Sun are strikingly pertinent especially when he says "Nobody buys music they can get for free on sites like YouTube." Youtube doesn't only encourage creation, it often fuels plain piracy much to the disregard (and displeasure) of the rights holders.

Then why is this even a debate? Why isn't he demanding that Google take down the video, so he and Rick Astley can get back to making money through obscurity?

Digital technology is the best thing that has happened for performers and songwriters since Thomas Edison invented the phonograph and made it possible for us to earn a living from something other than live performance. Recent developments in audio technology have made it possible for anyone with a laptop and a connection not only to make their own music, but also to distribute it around the world.

And no small part of that opportunity comes via Google and YouTube.

If you want, you can open a YouTube channel, post your own videos, and try to make money through commissions on Google's ads. Or you can do the same while embedding the video on your own website. Or you can bypass Google altogether, and create your own individual website while hosting your own video files, or hosting them through a service other than Google. And you can still put Google ads on that website to try to make money. Or ads from another service. Or ads you sell yourself. Or your concert tickets and band merchandise.

The notion here seems to be "Google has lots of money, and plays our videos on one of its web properties, so it should pay us a ton of money." If Google were making a ton of money off of those videos, I would agree with that. If the artists were telling Google, "Look, it's easy, do the following three things and you'll be making tons of money," I would say, "C'mon Google, give it a try." But the fact is, nobody knows how to turn online music videos into a profit center. It's possible that there is no secret - that online video will never generate much revenue, in which case artists can choose between the other benefits of being on YouTube (primarily free publicity) and the supposition that taking their videos off of YouTube will increase the sales of their recordings.